What is online trading?

You are here:
< Back

What is Online Trading?

Online trading is the act of placing buy/sell orders for financial securities and/or currencies with the use of a brokerage’s internet-based proprietary trading platforms. The use of online trading increased dramatically in the mid- to late-’90s with the introduction of affordable high-speed computers and internet connections.

Stocks, bonds, options, futures and currencies can all be traded online.

BREAKING DOWN ‘Online Trading’

The use of online trades has increased the number of discount brokerages because internet trading allows many brokers to further cut costs and part of the savings can be passed on to customers in the form of lower commissions.

Another benefit of online trading is the improvement in the speed of which transactions can be executed and settled, because there is no need for paper-based documents to be copied, filed and entered into an electronic format.

Test Your Skills With Trading Challenges
Put your trading skills to the test with our free Stock Simulator. The ideal platform to get your financial feet wet! Submit trades in a virtual environment before you start risking your own capital. Click here to sign up today and start interacting with other traders from diverse backgrounds and experiences, and learn the methods behind their trades to become a better investor.